Borders Group Reports Holiday Results With Comparable Store Sales Up 2.2% at U.S. Superstores; Management Guides Toward High End of Projected Q4 EPS Range.

ANN ARBOR, Mich. -- Borders Group Inc. (NYSE:BGP) today reported sales results for its fiscal fourth quarter to date (Oct. 23, 2005 through Jan. 8, 2006). At $1.3 billion, total consolidated sales increased by 1.4% for the quarter to date over the same period last year.

Sales within the Borders domestic superstore segment on a quarter-to-date basis were $800.5 million, which represents a 4.1% increase over the same period in 2004. Comparable store sales at domestic Borders superstores quarter to date were 2.2%, which is better than management's most recent projection of flat to down in the low single digits for the fourth quarter. Results were driven by strength in the book category, which was up by 6% on a comparable store sales basis for the quarter to date. Music continued its negative comparable store sales trend, declining by 12% quarter to date.

Waldenbooks generated quarter-to-date sales of $279.2 million, which is down 8.3% from last year, attributable in part to store closures. Comparable store sales at Waldenbooks declined by 2.6% quarter to date, in-line with management's most recent projection for a decline in the low to high single digits for the fourth quarter.

Borders Group's International segment generated total sales of $174.1 million, which is up 6.8% for the quarter to date, in-line with management's projection of a 6% to 12% increase. Excluding the impact of foreign currency translation, total International sales would have increased by 13.8%. With this release and moving forward, Borders Group will now also separately report comparable store sales for International Borders superstores. Included are all International superstores beginning in their 13th month of operation. International comparable store sales are calculated in local currency and include sales from licensed departments operating within International Borders superstores. For the quarter to date, comparable store sales at International Borders superstores increased by 0.8%.

Based on these sales results, which were offset somewhat by an increase in promotional spending, Borders Group now expects consolidated earnings per share for the fourth quarter of 2005 to range from $1.70 to $1.80, which compares to the previously estimated earnings per share range of $1.60 to $1.80. This range includes the impact of non-operating adjustments projected to be an after-tax charge in the fourth quarter of approximately $0.06 per share.

For the full year 2005, consolidated earnings per share are expected to be $1.35 to $1.45, compared to the previously issued consolidated earnings guidance range of $1.28 to $1.47 per share. Estimated earnings per share for the year include the impact of non-operating adjustments projected to be an after-tax charge for the year of approximately $.13 per share.

Borders Group also announced that its Board of Directors has approved a new company stock repurchase authority of $250 million. Purchases will be made primarily through open market transactions, subject to market conditions and trading. For fiscal 2005 to date, the company repurchased 11.2 million shares totaling $258 million.

Next Financial Release/Conference Call

Borders Group will issue final fourth quarter and full year 2005 results as well as initial guidance for 2006 on March 16 after market close followed by a conference call for investors March 17 at 8 a.m. Eastern.

About Borders Group

Headquartered in Ann Arbor, Mich., Borders Group is a leading global retailer of books, music and movies with more 1,200 stores and over 34,000 employees worldwide. More detailed information on the company is available at www.bordersgroupinc.com.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these forward-looking statements by the use of words such as "projects," "expected," "estimated," "look," "continuing," "plans," "guidance, " "goal," "will," "may," "intends," "anticipates," and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address matters such as the company's future financial performance (including sales and earnings guidance), its plans and expected benefits relating to store openings, closings and remodels, the addition of the Seattle's Best Coffee and Paperchase brands to new and certain remodeled stores and its intentions with respect to dividend payments and share repurchases.

These statements are subject to risks and uncertainties that could cause actual results and plans to differ materially from those included in the company's forward-looking statements. These risks and uncertainties include, but are not limited to, consumer demand for the company's products, particularly during the holiday season, which is believed to be related to general economic and geopolitical conditions, weather, and other factors; changes in accounting rules; asset impairments relating to under-performing stores or other unusual items; an unexpected increase in competition; uninsured losses from risks such as terrorism, earthquakes, or floods for which no, or limited, insurance coverage is maintained; higher than anticipated interest costs; energy disruptions, shortages or higher than anticipated energy costs; adverse litigation expenses or results; unanticipated work stoppages or increased labor costs; higher than anticipated merchandise or occupancy costs; the performance of the company's strategic initiatives, including international expansion, remodels and the addition of the Seattle's Best Coffee and Paperchase brands to certain Borders stores; the stability and capacity of the company's information systems; and changes in foreign currency exchange rates.

Exhibit 99.1 to the company's Form 10-Q for the fiscal quarter ended Oct. 22, 2005 filed with the Securities and Exchange Commission sets forth a more detailed discussion of these and other risk factors that could cause actual results and plans to differ materially from those included in the forward-looking statements, and that discussion is incorporated herein by reference. The company does not undertake any obligation to update forward-looking statements.